List and explain five principles of insurance.
Explanation
1. Insurable Interset: Importance For Insurance right
If you want to ask the insurance, you must have a relationship or interest for insurance between you andits designees. Generally its designees will feel a loss ifthe dipertanggungkan event occurs. Insuring your example and not the party that is a partner. If it comes to happen one thing, your partner will experiencelosses.
Another example is life insurance among the banks with the KPR. If it comes to happen one thing with theMORTGAGE, then the insurance company will pay the deficiency liability the KPR.
An example of the benefit for insured (Insurable Interest):
Family relationships, such as husband, wife, child, mother, father.
Business relationship, such as a creditor with the debtor, company with important people in the company.
2. the Utmost Good Faith: in good faith
Any agreement should be grounded with the goodwillbetween the two sides, including in the insuranceagreement. Insurance companies will accept the transfer of the risk with the principles of goodwill, for example, we give the data are true and honest, and does not cover the facts of health at the time of fillingthe form letter filing life insurance. Some cases the insurance company canceled the agreement, because the find health facts that are not in accordance with the statements of his client. Make not good allowsalso the insurance company did not pay the sum assured. The insurance company generally menulisangoodwill on policy and explained orally by life insurance agents.
3. the Law Of Large Numbers: the law of large numbers
The law of large numbers (law of large number) is the principle of statistics and probability theory that States the greater number of samples are used froman event, then the results of the radar might begetting closer to the average population. Simply putin the insurance world is: the more people who join the insurance, then chances are the magnitude of theloss will be close to the estimated losses.
Based on the theory of the law of large numbers (lawor large number), then the insurance companiesformed two tiers:
The level of Mortality that is the frequency or the number of the death toll.
The rate of Morbidity that is the frequency or the number of levels of pain, injuries, the occurrence ofdefects and other events that are insured.
The level of mortality and morbidita be one basis fordetermining insurance premiums.
4. Indemnity: principles Idemnity
The insurance company will indemnify according to the amount of the losses we have experienced. For example, the insurance company will pay or reimbursethe cost of hospital in accordance with hospital bills.This principle is basically serves to avoid participants who have the intention to benefit from the onset of afinancial loss on the health insurance program.
5. Subrogation: transfer of Rights Principle
The insurance company will transfer the rights to aparty that has been designated by its clients in the event of a loss. The insurance company will transfer the rights to a third party are harmed. The principle oftransfer of rights (subrogatio) is generally applied to the insurance company losses.